Nova Chemicals has given its final approval for work to begin on a $400-million upgrade at the company’s Corunna plant, a project that would ultimately allow the plant to use an all-ethane feedstock for its products.
Currently, Nova is using a single source for natural gas liquids that come from shale deposits in the eastern U.S. The project would expand the supply from that area.
The news is seen as an indication of long-term health for the company and for the Sarnia area, at least from a petrochemical perspective.
“It’s definitely going to move us forward on our plans to get a second feedstock supply in from Ohio, and more supply reliability,” Tom Thompson, the company’s regional manufacturing director, told another media outlet.”
Thompson cited longer-term sustainability at the Corunna site as being another benefit.
As recently as 2008, the Corunna plant, which was built in the mid 1970s, was losing money with a mix of oil and natural gas feedstocks it turns into ethylene and other chemicals.
The opportunity to tap into the emerging shale gas regions presented itself and Nova jumped on the idea, taking advantage of the much-lower cost of natural gas.
It has since spent millions to convert the plant to use natural gas-based feedstocks and connections to a pipeline owned and operated by Plains Midstream. That pipeline, which runs from Windsor to Sarnia, provides access to natural gas liquids from the Utica Shale Basin.
Thompson has said most of the project cost is for work done at the Corunna site, with a large turnaround project to be planned in 2017.
Even while the Corunna plant will be able to use 100% ethane feedstock, it will be able to take other feedstocks if necessary.
The value of the work has not been disclosed by Nova, which is indirectly owned by the Emirate of Abu Dhabi through the International Petroleum Investment Company.
There are about 1,000 employees in the Sarnia area and the company has two other plants besides Corunna in the area.
Nova says it will has also authorized continued engineering work to be done on a potential new polyethylene plant, possibly one that would be tied to expansion at the Corunna site and boost its ethylene output by 50%.
A decision on that new plant could come in 2017, Thompson has said.